Question 1

What personal characteristics should you look for in a full-service broker and why are they important?

Accepted Answer

1. a reputation for integrity,intelligen

Question 2

Placing a market order exposes the buyer to more risk than placing a limit order.

Accepted Answer

A) True 
 B)False

Question 3

Hern MacTavish only invests in lending investments.If his financial advisor gave him the list below,which might Hern invest in?

Accepted Answer

A)  Saving accounts 
B)  Stocks 
C)  Income-producing real estate 
D)  Bonds 
E)  Both A and D 
A)  Saving accounts 
B)  Stocks 
C)  Income-producing real estate 
D)  Bonds 
E)  Both A and D

Question 4

An initial public offering is the first time the company's stock is traded publicly.

Accepted Answer

A) True 
 B)False

Question 5

Lawrence Wright is slow in math.He has before him the equation of (ending value minus beginning value)and income return totalled,then divided by beginning value.This is used to find the

Accepted Answer

A)  rate of inflation. 
B)  capital gain. 
C)  capital loss 
D)  rate of return. 
E)  serialized rate of return. 
A)  rate of inflation. 
B)  capital gain. 
C)  capital loss 
D)  rate of return. 
E)  serialized rate of return.

Question 6

Amy and Bob have decided to borrow a portion of the purchase price of stocks from their broker.They will then have a ________ account.

Accepted Answer

A)  cash 
B)  round lot 
C)  margin 
D)  debtor 
E)  combination 
A)  cash 
B)  round lot 
C)  margin 
D)  debtor 
E)  combination

Question 7

The ________ rate is the interest to be paid annually on a bond as a percentage of its par value.

Accepted Answer

A)  base 
B)  coupon interest 
C)  face interest 
D)  compound interest 
E)  none of the above 
A)  base 
B)  coupon interest 
C)  face interest 
D)  compound interest 
E)  none of the above

Question 8

The Internet is full of investment information,and all of it is stringently regulated so you can be sure of its reliability.

Accepted Answer

A) True 
 B)False

Question 9

The risk that you will not be able to find a buyer at a fair market price,and will wind up having to sell for less than an asset's worth is called ________ risk.

Accepted Answer

A)  inflation 
B)  interest 
C)  liquidity 
D)  call 
A)  inflation 
B)  interest 
C)  liquidity 
D)  call

Question 10

Suppose that you are beginning an investment plan.You have decided that you want to retire in 30 years with $1,000,000 in your bank account at that time.How much would you need to invest at the end each of the next 30 years if you could earn 8%?

Accepted Answer

A)  $11,924,613.33 
B)  $83,860.16 
C)  $46,030.93 
D)  $22,045.16 
E)  $8,827.43 
A)  $11,924,613.33 
B)  $83,860.16 
C)  $46,030.93 
D)  $22,045.16 
E)  $8,827.43

Question 11

Long-term capital gains have favorable tax treatment over earned income.

Accepted Answer

A) True 
 B)False

Question 12

American Depository Receipts are receipts given by American banks for deposits in foreign countries.

Accepted Answer

A) True 
 B)False

Question 13

Discount brokers are so named because they are able to get you discounts on the market price of stocks.

Accepted Answer

A) True 
 B)False

Question 14

Specialists maintain a fair and orderly market by buying and selling stock from their inventory to keep the market from fluctuating more than it would otherwise.

Accepted Answer

A) True 
 B)False

Question 15

Describe the sources of risk in the risk-return trade off.

Accepted Answer

The interest rate risk is the risk of fl

Question 16

A day trader is an individual who trades with a very long-term investment horizon.

Accepted Answer

A) True 
 B)False

Question 17

You believe that the stock of MoabBikes will soon fall from its current price of $25 per share.You short 1,000 shares with your broker who has a 50% margin requirement.The price falls to $15 per share,but not before it pays a $5 dividend per share.Your commissions and other charges totaled $50.What was your total profit?

Accepted Answer

A)  $5 
B)  $2,450 
C)  $2,500 
D)  $4,950 
E)  $9,950 
A)  $5 
B)  $2,450 
C)  $2,500 
D)  $4,950 
E)  $9,950

Question 18

The ________ rate of return earned on an investment is unadjusted for lost purchasing power.

Accepted Answer

A)  effective 
B)  annual 
C)  real 
D)  nominal 
E)  none of the above 
A)  effective 
B)  annual 
C)  real 
D)  nominal 
E)  none of the above

Question 19

Call risk is the risk to bondholders that a bond may be called away from them before maturity.

Accepted Answer

A) True 
 B)False

Question 20

What does an effective asset allocation strategy provide to an investor?

Accepted Answer

A)  An effective diversification strategy 
B)  An opportunity to maximize their returns based on appropriate risk. 
C)  An opportunity to minimize their losses based on appropriate risk. 
D)  All of the above are correct 
E)  All but A are correct. 
A)  An effective diversification strategy 
B)  An opportunity to maximize their returns based on appropriate risk. 
C)  An opportunity to minimize their losses based on appropriate risk. 
D)  All of the above are correct 
E)  All but A are correct.

What personal characteristics should you look for in a full-service broker and why are they important?

Placing a market order exposes the buyer to more risk than placing a limit order.

Hern MacTavish only invests in lending investments.If his financial advisor gave him the list below,which might Hern invest in?

An initial public offering is the first time the company's stock is traded publicly.

Lawrence Wright is slow in math.He has before him the equation of (ending value minus beginning value)and income return totalled,then divided by beginning value.This is used to find the

Amy and Bob have decided to borrow a portion of the purchase price of stocks from their broker.They will then have a ________ account.

The ________ rate is the interest to be paid annually on a bond as a percentage of its par value.

The Internet is full of investment information,and all of it is stringently regulated so you can be sure of its reliability.

The risk that you will not be able to find a buyer at a fair market price,and will wind up having to sell for less than an asset's worth is called ________ risk.

Suppose that you are beginning an investment plan.You have decided that you want to retire in 30 years with $1,000,000 in your bank account at that time.How much would you need to invest at the end each of the next 30 years if you could earn 8%?

Long-term capital gains have favorable tax treatment over earned income.

American Depository Receipts are receipts given by American banks for deposits in foreign countries.

Discount brokers are so named because they are able to get you discounts on the market price of stocks.

Specialists maintain a fair and orderly market by buying and selling stock from their inventory to keep the market from fluctuating more than it would otherwise.

Describe the sources of risk in the risk-return trade off.

A day trader is an individual who trades with a very long-term investment horizon.

The ________ rate of return earned on an investment is unadjusted for lost purchasing power.

Call risk is the risk to bondholders that a bond may be called away from them before maturity.

What does an effective asset allocation strategy provide to an investor?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 11: Investment Basics

What personal characteristics should you look for in a full-service broker and why are they important?

Placing a market order exposes the buyer to more risk than placing a limit order.

Hern MacTavish only invests in lending investments.If his financial advisor gave him the list below,which might Hern invest in?

An initial public offering is the first time the company's stock is traded publicly.

Lawrence Wright is slow in math.He has before him the equation of (ending value minus beginning value)and income return totalled,then divided by beginning value.This is used to find the

Amy and Bob have decided to borrow a portion of the purchase price of stocks from their broker.They will then have a ________ account.

The ________ rate is the interest to be paid annually on a bond as a percentage of its par value.

The Internet is full of investment information,and all of it is stringently regulated so you can be sure of its reliability.

The risk that you will not be able to find a buyer at a fair market price,and will wind up having to sell for less than an asset's worth is called ________ risk.

Suppose that you are beginning an investment plan.You have decided that you want to retire in 30 years with $1,000,000 in your bank account at that time.How much would you need to invest at the end each of the next 30 years if you could earn 8%?

Long-term capital gains have favorable tax treatment over earned income.

American Depository Receipts are receipts given by American banks for deposits in foreign countries.

Discount brokers are so named because they are able to get you discounts on the market price of stocks.

Specialists maintain a fair and orderly market by buying and selling stock from their inventory to keep the market from fluctuating more than it would otherwise.

Describe the sources of risk in the risk-return trade off.

A day trader is an individual who trades with a very long-term investment horizon.

The ________ rate of return earned on an investment is unadjusted for lost purchasing power.

Call risk is the risk to bondholders that a bond may be called away from them before maturity.

What does an effective asset allocation strategy provide to an investor?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters